Nepal | July 08, 2020

Fiscal-end pressure weighs on share market

Investors in wait-and-see for Monetary Policy

Himalayan News Service
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Kathmandu, July 13

The country’s sole secondary market continued to witness selling pressure in the trading week between July 7 and 11, as share investors reeled under pressure to pay interest on marginal loans to banks and financial institutions with the fiscal year ending on July 16.

At the same time, they are awaiting the Monetary Policy for 2019-20, which was scheduled to be announced on July 12, but has been postponed.

The date for the announcement has not been fixed yet.

“Investors are currently selling shares to maintain their balance and pay fiscal year-end interests to BFIs and taxes,” said Radha Pokharel, chairperson of Nepal Pujibazar Laganikarta Sangh, adding that share investors are eagerly awaiting the monetary policy, hoping for provisions that will be favourable for the secondary market.

Consequently, Nepal Stock Exchange index was in downward trend in review week, slipping by 0.95 per cent or 11.93 points. The sensitive index also fell by 1.15 per cent or 3.14 points to 268.33 points and float index dipped by 0.93 per cent or 0.87 point to 91.72 points.

In the review period, weekly turnover dropped by 1.36 per cent as compared to the previous week to Rs 2.63 billion. In the previous week, the market had witnessed turnover of Rs 2.66 billion. Likewise, the daily average turnover stood at Rs 526.67 million, down 1.36 per cent compared to previous week’s Rs 533.94 million.

In the review week, trading of mutual funds plummeted by 88.21 per cent against the previous week to Rs 8.97 million. In the previous week, mutual funds had witnessed turnover of Rs 76.05 million.

The secondary market had opened at 1,260.50 points on Sunday and fell by 4.42 points by end of first trading day. On Monday, market again dipped by 8.70 points. On Tuesday, however, it recovered some of the losses by inching up 2.92 points. The optimism was not sustained, though and the local bourse shed 1.12 points on Wednesday and slipped by 0.62 point on Thursday to close the week at 1,248.55 points.

In the review week, finance and hydropower subgroups landed in the green zone.

The finance subgroup went up by 0.54 per cent or 3.35 points to 619.54 points and hydropower sub-index inched up by 0.01 per cent or 0.20 point to 1,188.55 points.

Meanwhile, life insurance subgroup was the biggest loser of the week, dropping by 1.68 per cent or 113.16 points due to share price of Nepal Life Insurance descending by six rupees to Rs 889. Similarly, non-life insurance also descended by 1.59 per cent or 81.70 points to 5,044.26 points.

Others sub-index lost 1.58 per cent or 11.43 points to rest at 710.83 points.

Manufacturing subgroup fell by 1.50 per cent or 40.08 points to 2,635.75 points and microfinance sub-index also went down by 1.22 per cent or 17.68 points to 1,424.58 points. Similarly, hotels landed at 2,031.40 points, down 1.16 per cent or 23.94 points and banking subgroup fell by 0.76 per cent or 8.64 points to 1,126.77 points.

Trading subgroup dropped by 0.51 per cent or 1.34 points to 259.85 points and development banks fell by 0.31 per cent or 5.02 points to 1,595.34 points.

In the review week, Civil Bank (Promoter Share) was the leader in terms of weekly turnover with Rs 175.36 million. It was followed by Nepal Bank with Rs 166.84 million, Civil Bank with Rs 137.41 million, Prabhu Bank (Promoter Share) with Rs 114.57 million and Mega Bank with Rs 106.43 million.

In terms of weekly trading volume too Civil Bank (Promoter Share) took the lead with 1,753,000 of its shares changing hands. Civil Bank with 874,000 shares, Prabhu Bank (Promoter Share) with 670,000 shares, Mega Bank Nepal with 502,000 shares and Nepal Bank with 494,000 shares followed suit.

Meanwhile, Infinity Laghubitta Bittiya Sanstha was the forerunner in terms of number of transactions with 2,697 deals.

Civil Bank with 1,734, Swabhimann Laghubitta Bittiya Sanstha with 1,548, Mega Bank Nepal with 1,480 and Upper Tamakoshi Hydropower with 1,128 transactions rounded up the top five in this category.

A version of this article appears in print on July 14, 2019 of The Himalayan Times.

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